RABEMO ZUMOMO LOTHA,DIMAPUR vs. ITO WARD 2 DIMAPUR , DIMAPUR

IN THE INCOME TAX APPELLATE TRIBUNAL – GUWAHATI BENCH VIRTUAL BENCH AT KOLKATA Before Shri Sonjoy Sarma, Judicial Member and Shri Rakesh Mishra, Accountant Member ITA Nos. 112/GTY/2026 Assessment Year: 2021-22 Rabemo Zumomo Lotha……………………………………….………...Appellant 7, Lotha Colony Sewak Road Dimapur, Nagaland-797112 [PAN: AFBPL2019N] vs. ITO, Ward-2, Dimapur……………..…………………..……...…..…..Respondent Assam-797112 Appearances by: Shri Kishor Jain, FCA, appeared on behalf of the Appellant. Shri Santosh Kumar Karnani, Addl. CIT, appeared on behalf of the Respondent. Date of concluding the hearing : April 21, 2026 Date of pronouncing the order : April 27, 2026

ORDER Per Sonjoy Sarma, Judicial Member: The present appeal filed by the assessee is directed against the order dated 10.12.2025 passed by the NFAC, Delhi [hereinafter referred to as the ‘Ld. CIT(A)] u/s 250 of the Income Tax Act, 1961 (the ‘Act’) for the assessment year 2021-22. 2. Brief facts of the case are that, assessee is an individual engaged in the business of wholesale trading of goods including sugar, also associated with trauma care facility. The case of the assessee was selected for scrutiny assessment on the basis of information received discrepancies in purchase. It was observed by the Assessing Officer that assessee had sold substantial purchases from certain supplier who were either non-existence or non-filer of income tax return. Consequentially,

ITA No.112/GTY/2026 Rabemo Zumomo Lotha lower turn-over in their return as compared to the transaction reflected in the assessee’s GST return filing. Based on this, the Assessing Officer believe that there is a possibility of showing low turn-over in order to suppressed taxable income. Accordingly, notices u/s 143(2) and 142(1) were issued to the assessee. The assessee complied with the notices and furnished details from time to time. However, assessee also filed a return of income declaring income as NIL, after claim exemption u/s 10(26) of the Act, being a Schedule Tribe, residing in notified schedule area. However, the Assessing Officer was not satisfied with the submission made by the assessee. Consequently, the Assessing Officer completed the assessment by making the addition u/s 69A unexplained to the extent of Rs.87,05,04,840/- estimated business profit at Rs.5,15,30,022/- undisclosed interest income of Rs.17,64,998/-, dividend income of Rs.74,700/-. Thus, the total income of the assessee was assessed at Rs.94,38,74,560/-. 3. Dissatisfied with the above order, assessee preferred an appeal before the Ld. CIT(A), where the Ld. CIT(A) after considering the submission granted partial relief to the assessee in relation with addition of Rs.87,05,04,840/- made u/s 69A of the Act by deleting the same. However, the Ld. CIT(A) upheld the business profit but enhance the income by applying a net profit rate of 12.5% on the total turn-over of Rs.72,02,58,742/- resulting in an addition of Rs.9,00,32,342/- as against Rs.5,15,30,022/- made by the Assessing Officer. The addition on account of interest income of Rs.17,64,998/- and dividend income of Rs.74,700/- were also sustained. 4. Still aggrieved by the above order, assessee is in appeal before this Tribunal. At the time of hearing, the Ld. AR categorically stated that the impugned order passed by the Ld. CIT(A) is bad in law, where certain

ITA No.112/GTY/2026 Rabemo Zumomo Lotha partial relief has been granted to the assessee but enhancement of profit from Rs.5,15,30,022/- to Rs.9,00,32,342/- without issue any show cause notice it is clearly violation of section 251(2) of the Act and principles of natural justice. He further stated that assessee is a Schedule Tribe residing in a notified schedule area, as income earned therein exempt u/s 10(26) of the Act. Therefore, the addition sustained by the Ld. CIT(A) to the extent as in the case of assessee is bad in law and liable to be deleted. 5. On the other hand, the Ld. DR supported the decision of the authorities below. The Ld. DR contended that although substantial relief was granted to the assessee by deleting the addition u/s 69A of the Act, as the assessee has failed to properly substantiate the genuineness of the transaction and submitting proper books of account, therefore, assessment of the income and partial confirmation of additions were justified. 6. We, after hearing the rival submissions of the parties and perusing the material available on record, we find that the assessee has claimed to be a Scheduled Tribe, residing in the notified area, and earned income therefrom, by claiming applicability of section 10(26) of the Act. However, we find that the issue has not been properly examined either by the Assessing Officer or the Ld. CIT(A), which needs to be examined. Accordingly, we set aside the issue to the file of the Ld. CIT(A) with a direction to make a de novo assessment, and the Assessing Officer is directed to examine the issue afresh in accordance with law, after giving adequate opportunity of being heard to the assessee and considering the submissions filed by the assessee. The assessee is also directed to cooperate and furnish the details to substantiate the claim of the assessee.

ITA No.112/GTY/2026 Rabemo Zumomo Lotha 7. In the result, appeal of the assessee is allowed for statistical purposes.

Kolkata, the 27th April, 2026.

Sd/- Sd/- [Rakesh Mishra] [Sonjoy Sarma] Accountant Member Judicial Member Dated: 27.04.2026. DP, PS Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- , 5. CIT(DR),

//True copy// By order Assistant Registrar, Kolkata Benches